ConocoPhillips expands Montney land position by US$120 million as appraisal work continues

Company announces acquisition of about 35,000 acres of additional lands located adjacent to its existing acreage

| ConocoPhillips

ConocoPhillips says it has increased its land position in the Montney play by 32%.

The company announced this week it recently spent $120 million to acquire approximately 35,000 acres of additional lands located adjacent to its existing acreage.

This increases its overall Montney land position to 140,000 net acres.

While ConocoPhillips reported a quadrupling of its Montney resource base to two billion boe between 2016-2017, it is still relatively early days for large-scale development.

“There's a lot of work going on there in '18 and '19 that I would characterize as appraisal work,” executive vice-president Al Hirshberg said on the company’s fourth quarter analyst call.

ConocoPhillips is planning a 12-well test pad to trial stacking and spacing in the Montney this year; the company says its main focus is on infrastructure access and margins.

“The problem with these Montney wells is they're so great that if you want to do a spacing and stacking test where you have a handful of wells, you've got to build quite a bit of infrastructure just to handle all the production that comes gushing out,” Hirshberg said.

“To do a single pad spacing and stacking test, which is where we're headed, we have to build a gas plant. We've got to build a crude condensate processing plant. We've got to build a water treatment plant….So that's really what we're focused on. We'll start construction of those facilities this year and finish the construction next year. That'll get us into the next round of really solid data on Montney that will guide our development work.”